Market

Potential impact

The main industries served by Umicore are automotive (clean mobility materials, recycling), consumer electronics (rechargeable battery materials, recycling, coating and electroplating solutions) and non-ferrous metal mining and refining industries (recycling activities). Umicore is sensitive to any major growth or global reduction in activity levels or market disruptions in these industries.

Change in context

The global economic outlook started on a positive note in the first half of 2018, supported by solid growth in global manufacturing and trade. Trade and consumer confidence began to decline over the summer owing to geo-political and trade tensions, uncertainty about Brexit, and tariff implementations.

After modest growth in the first half of 2018, the global automotive industry started to contract in the second half, with a slowdown in the Chinese and European car markets. It is anticipated that demand in the automotive sector will continue to be impacted by the less favorable macro-economic environment witnessed in the beginning of 2019.

Although the short-term outlook is anticipated to be more subdued demand in key regions, more stringent vehicle emission legislation coming into force on major markets in the coming years is expected to provide a substantial longer-term uplift.

The risk profile of Umicore reflects growing exposure to the automotive industry and to Asia, in both cases driven by the fast-growing sales of cathode materials for use in electrified vehicles.

With its broad portfolio of cathode material technologies certified for the most stringent automotive requirements, its industrial-scale production capabilities and its qualifications on more than 20 platforms, Umicore should continue to benefit disproportionally from the accelerating penetration of electrified vehicles.

In the consumer electronics sector, demand for cathode materials for rechargeable batteries is sensitive to the macro-economic environment.
Our broad portfolio of other products used in consumer electronics tends to compensate for market fluctuations.

In recycling our process remains unique, giving a stable outlook in this high-value market.

Measures taken by umicore

Umicore is delivering on its growth strategy and is becoming the undisputed leader in clean mobility materials and recycling. As a result, Umicore delivered another set of record results in 2018 and reached its Horizon 2020 targets two years ahead of schedule. Umicore won significant additional business in the second half of 2018 which will further accelerate its growth in the coming years.

The Executive Committee undertook a review of potentially disruptive market and technology trends in automotive and discussed its findings with the Board of Directors.

In recycling a continuous program of new investments aims to optimize future performance and to enhance environmental performance.